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Tax Allowances: Part-time Employment

Volume 508: debated on Wednesday 24 March 2010

To ask the Chancellor of the Exchequer if he will bring forward proposals for a pilot scheme to implement an earnings disregard of £50 a week to assist people who are on benefits to take jobs of 16 or fewer hours a week. (322239)

I have been asked to reply.

Within the benefits system, some groups can already earn £50 per week or more without any loss of benefit. These include people on employment and support allowance and incapacity benefit who have access to a permitted work rule which allows them to earn up to £93.

The progression to work pathfinders will operate in four Jobcentre Plus districts. They will come into effect from the date of claim for people claiming after 25 October 2010 and from April 2011 for people already on benefit at that date.

The pathfinders will build on the existing regime for lone parents of regular work-focused interviews and action planning and require customers to undertake work-related activities which will aim to move them closer to the labour market and, ultimately, into work, when they become ready to do so. A £50 financial incentive/disregard was announced during the passage of the Welfare Reform Bill.

The Government believe that we should improve work incentives for lone parents and intend to include an enhanced earnings disregard for them in the pathfinders. We are currently considering the level and structure of this disregard with a view to providing the most effective incentive for lone parents to try out work.